In The Wave Principle of Human Social Behavior, Robert Prechter said that a rising negative social mood appears to correlate with a collective increase in discord, fear, depression, malevolence and destructiveness. These manifestations are on display in Venezuela, where negative mood has driven economic decline, crime, social unrest and political upheaval. Chuck Thompson looks at Venezuela’s plight in the February 2017 issue of The Socionomist. Following are excerpts from his article.

Socionomists have shown evidence that negative social mood engenders recessions; declining birth rates; and increases in crime, disease, social unrest and dissatisfaction with elected leaders. These expressions are currently on display in Venezuela, whose inflation-adjusted stock market has been in a nosedive since 2015. …

Figure 1 is an updated version of Alan Hall’s chart from the September 2016 issue of The Socionomist. It shows the Caracas Stock Market Index adjusted for inflation via the International Monetary Fund’s (IMF) Venezuela Consumer Price Index (CPI). …

The IMF’s CPI data extend only through December 2015 (black line). Hall used the IMF’s forecast for inflation to produce the remainder of the line (shown in red), which we’ve extended to the present. Though Venezuela’s nominal stock prices have been rising for several years, Figure 1 provides a true reflection of the negative mood that is currently affecting the country. …

In the 1950s, there was more U.S. investment in Venezuela than in the rest of Latin America combined. By 1958, the country had an income per capita equivalent to 76% of the U.S. per capita income, which placed it ahead of many European countries. The Venezuela of today, however, looks far different than it did in those days. The country is in a deep recession. Its economy contracted by 6.2% in 2015 and was forecast to contract by 10% last year. (The government stopped releasing GDP figures in February 2016). …

Today, food in Venezuela is in short supply, and residents line up outside supermarkets to buy basic goods such as powdered milk. Last year, Venezuela’s government told residents in urban areas to start growing their own food wherever they could find space, including private terraces, communal areas, jails and schools. …

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